Are we Ready for Big Data in Real Estate?
Will Big Data affect property markets more than the birth of the Internet?
3 min read
For the longest time, homebuyers and property investors could not easily access the kinds of real estate information available to brokerages and agencies. We had to either manually scrape for relevant details from first-hand knowledge and often-outdated public sources, or depend on brokers or agents in exchange for assurance and expertise charged by the property.
This is quickly changing. Big Data start-ups are redefining how much information can be found online and how easy it will be to make use of this information. Anyone who isn’t moving towards Big Data implementation in property will soon find themselves miles behind their competition, like it or not.
Information from Everywhere
Powered by advanced AIs and algorithms, Big Data analytic providers host websites that allow portfolio managers and property investors to access thousands or even tens of thousands of traditional and non-traditional property details easily.
This can range from having the historical pricing data of all units in a single multi-family residential, to crime rates, schools, public transport and even the number of coffee shops within a 3km radius and their average ratings calculated based on their online reviews.
While it could take days or weeks for a property investor to get this information on just a single property, Big Data property platforms can you get much more data on hundreds of properties in mere minutes.
Opportunities in Big Data
Different property firms use these data points in different ways, each specializing in different capabilities of Big Data Analytics towards different applications in the Real Estate Industry. Some of these applications are already being used in the US at a consumer level.
Firms such as Proportunity process these data points using AIs to predict the growth rates of properties, enabling investors to make better choices based on long-term returns on a property.
Others like Zillow provides automated valuation methods for residential properties in the US, making vast amounts of once-hidden information fully transparent which helps buyers and sellers make informed price decisions.
The Consequences of Transparency
When Big Data providers begin distributing their wealth of information in developing markets such as Malaysia, most of us will experience a complete shift from knowing little to suddenly knowing too much. All information will become standardized and easily verifiable. Consumers will have an easier time finding properties with their ideal attributes.
On the flipside, property investors will face new challenges in remaining competitive in the market. With the playing field being levelled in terms of information access, what leverage will individual investors have over many other buyers and sellers in the market? How can your property stand out if its value is determined to be less than competitive? How can you take advantage of information everyone can access to create value that is unique?
Big Data will totally disrupt the pre-sales process for property markets in Malaysia and the rest of the world. Consumers and industry professionals must both learn to harness the same available information in more efficient and creative ways to fully leverage on the benefits of Big Data to remain competitive in the near-transparent property market of tomorrow.
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